Why Offline Bitcoin ?
Computer security is hard. Physical security is much easier to accomplish.
Using Offline Bitcoin allows you to store your wealth securely in an offline vault. Your own vault that you control physically.
You can transfer needed amounts to online wallets on your phone or computer.
Bitcoin is just like cash, you should only carry around spending money.
What is an Offline Bitcoin Transaction ?
An offline Bitcoin transaction is signed with a computer that is not connected to the internet (or any network).
Assuming the installation process was secure, the offline computer can not be reached by hackers.
To create a Bitcoin payment the offline machine creates a Bitcoin transaction. It can be carried by an USB flash disk or QR code to an online machine. From there it can be broadcast normally to the Bitcoin Network.
Your private key never touches the Internet. Maximum Security.
This solution provides a secure execution environment equivalent to the hardware Trezor, Ledger or BitKey. While more flexible as you are using your own hardware and can make software updates more easily.
1. How do I create an offline transaction ?
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2. Retrieve the unspent outputs for your bitcoin address. Use the button Send Bitcoin
paste your input bitcoin address and click load
Enter destination address, amount and transaction fee.
Cut and paste the resulting transaction to a text file and transfer it to the USB key. Alternatively you can also export it as a QR code image.
3. Verify your transaction on your offline machine. Use the button Verify.
Double check the destination bitcoin address and amount of bitcoins sent.
4. Offline Sign and submit the transaction to the Bitcoin network. Use the button Sign.
Enter the private key from the input bitcoin address to sign the transaction. Now the resulting transaction is ready to be broadcast on the Bitcoin Network.
Again you can export the transaction as a text file or as a QR code image.
Benefits of Bitcoin Offline Transactions
At no point in this process is the private key data exposed
through the transaction data. Your private key never touches the internet,
for maximum security.
The biggest threat to an
offline wallet is an USB-key virus that executes when plugged in.
However, such viruses would have to be
highly targeted, and can be mostly mitigated by disabling USB-auto-run
on the offline computer.
Alternatively, you can transfer this information using the new QR Code
Generator Option. No networking of any kind needed.
Take Time to get Familiar with the Process
It is normal to be uneasy using new software to store your savings, especially with advanced features.
Make a few offline transactions with new addresses/keys and small amounts of bitcoins.
After a couple of offline transactions you will be doing them in less than a minute.
You will be able to say that you are your own bank!
Bitcoin Address and Private Key Reuse
When you reuse your Bitcoin Address you reveal your balance and transaction history of that address to your counterparty.
Losing financial privacy.
Another un-desirable problem is that for each use there is a hash signature on the blockchain generated with the
private key. There is a theoretical attack exploting information from two or more of this signatures.
This attack has not been seen yet, and depends on the discovery of practical quantum computing.
So both for privacy and security, Bitcoin addresses should not be reused. Especially for large amounts of coins.
For offline cold wallet storage the simplicity of having only one address/key to backup is important. As well as not
having any more change addresses to add complexity. Once the coins come out of cold storage it is best practice not to
reuse addresses. You can simply move them to a newly generated address/private key.
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